Edgar Filing: COMPETITIVE COMPANIES INC

cci-10q_093009.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

x QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2009

 TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 333-76630

COMPETITIVE COMPANIES, INC

(Exact name of registrant as specified in its charter)

Nevada		65-1146821
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

3751 Merced Drive, Suite A
Riverside, CA		92503
(Address of principal executive offices)		(Zip Code)

(951) 687-6100

(Registrant’s telephone number, including area code)

Copies of Communication to:

Stoecklein Law Group

402 West Broadway

Suite 690

San Diego, CA 92101

(619) 704-1310

(619) 704-1325

Indicate by check mark whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes x No 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes  No 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Ruble 12b-2 of the Exchange Act.

Large accelerated filer 	Accelerated filer 

Non-accelerated filer  (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  No x

The number of shares of Common Stock, $0.001 par value, outstanding on November 23, 2009, was 98,745,816 shares.

PART I – FINANCIAL INFORMATION

Item 1. Financial Statements.

Competitive Companies, Inc.
Condensed Consolidated Balance Sheets

	September 30,			December 31,
	2009			2008
Assets	(Unaudited)

Current assets:
Cash	$	56,559		$	23,340
Accounts receivable, net of allowance of $12,000 and $75,913
at September 30, 2009 and December 31, 2008, respectively		22,153			82,514
Prepaid expenses		6,917			2,997
Total current assets		85,629			108,851

Property and equipment, net		78,837			56,425

Other assets:
Deposits		1,366			1,366

Total assets	$	165,832		$	166,642

Liabilities and Stockholders' (Deficit)

Current liabilities:
Accounts payable	$	643,182		$	162,812
Accrued expenses		61,037			32,025
Customer deposits		39,914			44,670
Current maturities of notes payable		209,713			11,700
Current maturities of convertible debt, net of unamortized
discounts of $3,239 and $2,630 at September 30, 2009
and December 31, 2008, respectively		86,761			12,370
Total current liabilities		1,040,607			263,577

Notes payable, less current maturities		-			8,476

Total liabilities		1,040,607			272,053

Stockholders' (deficit):
Preferred stock, $0.001 par value 10,000,000 shares authorized:
Class A convertible, no shares issued and
outstanding with no liquidation value		-			-
Class B convertible, 1,495,436 shares issued and
outstanding with no liquidation value		1,495			1,495
Class C convertible, 1,000,000 shares issued and
outstanding with no liquidation value		1,000			1,000
Common stock, $0.001 par value, 500,000,000 shares authorized,
95,056,919 and 64,187,630 shares issued and outstanding
at September 30, 2009 and December 31, 2008, respectively		95,057			64,188
Additional paid-in capital		2,549,743			2,913,469
Subscriptions payable, 9,915,499 shares and 2,180,280 shares
at September 30, 2009 and December 31, 2008, respectively		494,274			114,014
Accumulated (deficit)		(4,016,344	)		(3,199,577	)
Total stockholders' (deficit)		(874,775	)		(105,411	)

Total liabilities and stockholders' (deficit)	$	165,832		$	166,642

The accompanying notes are an integral part of these financial statements.

Competitive Companies, Inc.
Condensed Consolidated Statements of Operations
(Unaudited)


	For the three months ending						For the nine months ending
	September 30,						September 30,
	2009			2008			2009			2008

Revenue	$	69,504		$	158,966		$	233,240		$	518,542
Cost of sales,
exclusive of depreciation shown below		69,215			93,326			298,786			298,548

Gross profit (loss)		289			65,640			(65,546	)		219,994

Expenses:
General and administrative		244,895			87,164			453,561			237,397
Salaries and wages		38,311			46,187			192,138			151,147
Consulting fees		140			90,813			10,967			91,687
Depreciation		11,646			8,553			32,321			25,659
Bad debts (recoveries)		(361	)		(2,514	)		47,029			4,312
Total operating expenses		294,631			230,203			736,016			510,202

Net operating (loss)		(294,342	)		(164,563	)		(801,562	)		(290,208	)

Other income (expenses):
Other income (expense)		(975	)		-			(975	)		-
Interest expense		(6,159	)		(1,798	)		(14,230	)		(5,694	)
Total other income (expenses)		(7,134	)		(1,798	)		(15,205	)		(5,694	)


Net (loss)	$	(301,476	)	$	(166,361	)	$	(816,767	)	$	(295,902	)

Weighted average number of common shares
outstanding - basic and fully diluted		93,491,430			60,399,397			80,586,748			57,960,502

Net (loss) per share - basic and fully diluted	$	(0.00	)	$	(0.00	)	$	(0.01	)	$	(0.01	)

The accompanying notes are an integral part of these financial statements.

Competitive Companies, Inc.
Condensed Consolidated Statements of Cash Flows
(Unaudited)

	For the nine months ending
	September 30,
	2009			2008

Cash flows from operating activities
Net (loss)	$	(816,767	)	$	(295,902	)
Adjustments to reconcile net (loss) to
net cash (used in) operating activities:
Depreciation		32,321			25,659
Provision for bad debts (recoveries)		47,029			4,312
Share-based compensation		118,664			156,918
Amortization of beneficial conversion feature		8,310			-
Decrease (increase) in assets:
Accounts receivable		40,775			(119	)
Prepaid expenses		(1,120	)		-
Increase (decrease) in liabilities:
Accounts payable		250,343			50,674
Accrued expenses		21,583			24,091
Customer deposits		(4,756	)		1,910
Net cash (used in) operating activities		(303,618	)		(32,457	)

Cash flows from investing activities
Purchase of equipment		(9,987	)		(1,640	)
Cash acquired in merger		25,273			-
Net cash provided by (used in) investing activities		15,286			(1,640	)

Cash flows from financing activities
Proceeds from convertible debt		81,277			31,000
Principal payments on notes payable		(14,650	)		(32,935	)
Proceeds from sale of common stock		254,924			39,500
Net cash provided by financing activities		321,551			37,565

Net increase in cash		33,219			3,468
Cash - beginning		23,340			3,909
Cash - ending	$	56,559		$	7,377

Supplemental disclosures:
Interest paid	$	6,826		$	1,292
Income taxes paid	$	-		$	-

Non-cash investing and financing activities:
Value of shares issued for subscriptions payable	$	116,514		$	-

The accompanying notes are an integral part of these financial statements.

Competitive Companies, Inc.

Notes to Consolidated Financial Statements

Note 1 – Nature of Business and Significant Accounting Policies

The condensed consolidated interim financial statements included herein, presented in accordance with United States generally accepted accounting principles and stated in US dollars, have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading.

These statements reflect all adjustments, consisting of normal recurring adjustments, which in the opinion of management are necessary for fair presentation of the information contained therein. It is suggested that these consolidated interim financial statements be read in conjunction with the financial statements of the Company for the year ended December 31, 2008 and notes thereto included in the Company's Form 10-K annual report. The Company follows the same accounting policies in the preparation of interim reports.

In June 2009, the Financial Accounting Standards Board (“FASB”) issued the FASB Accounting Standards Codification (the “ASC”). The ASC has become the single source of non-governmental accounting principles generally accepted in the United States (“GAAP”) recognized by the FASB in the preparation of financial statements. The ASC does not supersede the rules or regulations of the Securities and Exchange Commission (“SEC”), therefore, the rules and interpretive releases of the SEC continue to be additional sources of GAAP for the Company. The Company adopted the ASC as of July 1, 2009. The ASC does not change GAAP and did not have an effect on the Company’s financial position, results of operations or cash flows.

Results of operations for the interim period are not indicative of annual results.

The Company is in the telecommunications industry with operations in Riverside, CA and now with the acquisitions as described in Note 3, San Antonio, Texas and Wisconsin. The Company’s Wisconsin operations consist of providing Dial-up, Wireless and DSL Internet services to businesses and residents within various markets throughout Wisconsin, the United States and Puerto Rico. In May of 2009, the Company began to shift its focus from residential apartment services to serving a wider array of customers as a general broadband internet service provider with a concentrated focus on fixed wireless for its broadband delivery. The Company has terminated its Internet services to residential apartments and does not plan to include this in its future business model.

Reclassifications

Certain reclassifications have been made to prior year amounts to conform to the current year presentation.

Competitive Companies, Inc.

Notes to Consolidated Financial Statements

Note 2 – Going Concern

The accompanying condensed consolidated financial statements have been prepared assuming that the Company will continue as a going concern which contemplates the recoverability of assets and the satisfaction of liabilities in the normal course of business. We have incurred continuous losses from operations, have an accumulated deficit of $4,016,344 and a working capital deficit of $954,978 at September 30, 2009, and have reported negative cash flows from operations over the last five years. In addition, we do not currently have the cash resources to meet our operating commitments for the next twelve months, and we expect to have ongoing requirements for capital investment to implement our business plan. Finally, our ability to continue as a going concern must be considered in light of the problems, expenses and complications frequently encountered by entrance into established markets and the competitive environment in which we operate.

On May 5, 2009, DiscoverNet, Inc., a wholly owned subsidiary of Competitive Companies, Inc. which was acquired on April 2, 2009 as described in Note 3 below, filed for bankruptcy protection under Chapter 11 of the U.S. Bankruptcy Code.

Since inception, our operations have primarily been funded through private equity financing, and we expect to continue to seek additional funding through private or public equity and debt financing.

Our ability to continue as a going concern is dependent on our ability to generate sufficient cash from operations to meet our cash needs and/or to raise funds to finance ongoing operations and repay debt. However, there can be no assurance that we will be successful in our efforts to raise additional debt or equity capital and/or that our cash generated by our operations will be adequate to meet our needs. These factors, among others, indicate that we may be unable to continue as a going concern for a reasonable period of time.

Our consolidated financial statements do not include any adjustments relating to the recoverability and classification of recorded asset amounts, or the amounts and classification of liabilities that might be necessary should we be unable to continue as a going concern.

Note 3 – Business Combination

On April 2, 2009, the Company entered into an acquisition agreement and plan of merger whereby the Company acquired 100% of the outstanding interest of four private companies under common control by the CEO of Competitive Companies, Inc. Pursuant to the share exchange agreement, Competitive Companies, Inc. (CCI) acquired 100% of the combined equity of DiscoverNet, Inc. (DNI), ICM, Inc. (ICMI), ICM, LLC (ICML), and DiscoverNet, LLC (DNL) in exchange for stock on a 10 to 1 basis, resulting in the issuance of 31,102,740 shares. The fair market value of the shares was $1,555,137 based on the closing stock price on April 2, 2009, the date of grant.

Competitive Companies, Inc.

Notes to Consolidated Financial Statements

The merger provides CCI with valuable assets, sound management and a solid investor base that is an integral part of our business.

The Company has recognized the identifiable assets acquired and liabilities assumed as follows:

		April 2, 2009
Consideration:
Equity instruments (31,102,740 shares issued of CCI1)		$	1,555,137
Fair value of total consideration exchanged		$	1,555,137

Recognized amounts of identifiable assets
	acquired and liabilities assumed:
	Cash	$	25,273
	Accounts receivable and intercompany loans		40,328
	Equipment		44,746
	Other current assets		2,804
	Accounts payable and accrued expenses		(249,964)
	Long term debt		(198,290)
	Consideration paid in excess of fair value		1,890,240
Total identifiable net assets		$	1,555,137
	1 The fair value of the 31,102,740 common shares issued as consideration paid for 100% of DNI, ICMI, ICML & DNL was determined on the basis of the closing market price of CCI’s common shares on the issuance date of April 2, 2009.
	2 The consideration paid in excess of the fair value of assets acquired and liabilities assumed has been allocated towards additional paid in capital due to the related party nature of the companies acquired (under common management by the Company’s CEO, Bill Gray).

The unaudited supplemental pro forma results of operations of the combined entity had the acquisition date been January 1, 2009 or January 1, 2008 are as follows:

Competitive Companies, Inc.

Notes to Consolidated Financial Statements

		Combined Pro Forma:
		For the nine months ending September 30, 2009		For the nine months ending September 30, 2008
		(Unaudited)		(Unaudited)
Expenses:
	Revenue	$	346,035	$	880,154
	Cost of sales		395,025		648,431
	Gross profit		(48,990)		231,723

	Operating expenses		1,011,795		1,124,140

Net operating (loss)			(1,060,785)		(892,417)

	Other income (expense)		(20,102)		7,179

Net (loss)		$	(1,080,887)	$	(885,238)

Weighted average number of common shares
	Outstanding – basic and fully diluted		90,192,455		79,813,485

Net (loss) per share – basic and fully diluted		$	(0.01)	$	(0.01)

Management believes the communications network, management team and other assets acquired will enable the Company to enhance their business model and enable the Company to take advantage of opportunities in the fast changing telecommunications industry.

Note 4 – Related Party

From time to time the Company has received loans from a former Officer, Jerald L. Woods. The total of the unsecured loans carried an 18% interest rate and were due on demand. The balance of the notes in the amount of $4,500 and accrued interest of $5,996 was paid in full during the three months ending June 30, 2009 (See Note 5).

During the three months ending March 31, 2009, Jerry Woods was also repaid $6,754 for unreimbursed expenses that he previously paid on behalf of the Company. An unpaid accounts payable balance of $4,325 remains outstanding as of September 30, 2009.

On January 30, 2009, during the annual meeting of shareholders, a new CEO was elected. Mr. William Gray was elected to replace Jerald L. Woods. During the meeting a new board of directors was elected by a majority of the shareholders. The following board members were elected:

Competitive Companies, Inc.

Notes to Consolidated Financial Statements

William Gray	Ray Powers
Jerald Woods	David Hewitt
Larry Griffin	Michael Benbow*
Tonni Lyn Smith-Atkins**	(* Resigned June 15, 2009)
(** Resigned March 17, 2009)

On April 2, 2009 we consummated an acquisition of four companies under common control by our CEO, Bill Gray. The following companies became wholly owned subsidiaries of Competitive Companies, Inc. and are consolidated in these financial statements:

DiscoverNet, Inc.	ICM, Inc.
ICM, LLC	DiscoverNet, LLC

On January 7, 2009, the Company capitalized website development costs in the amount of $9,987. The website development services were provided by DiscoverNet, Inc., a company under common control by the CEO, Bill Gray. The Company believes this to have taken place in an arm’s length transaction prior to the acquisition, and the amount capitalized represents the equivalent purchase price from a third party vendor.

Note 5 – Property and Equipment

Property and equipment consist of the following:

	September 30,		December 31,
	2009		2008

Telecommunication equipment and computers	$	245,741	$	274,419
Leasehold improvements		5,343		-
Office furniture & fixtures		87,676		-
Computer equipment		138,195		-
Software		46,116		-
		523,071		274,419
Less accumulated depreciation		(444,234)		(217,994)
	$	78,837	$	56,425

Depreciation expense totaled $32,321 and $25,659 for the nine months ending September 30, 2009 and 2008, respectively. During the nine months ending September 30, 2009, the Company disposed of $38,665 of fully depreciated assets that were no longer in service. No gain or loss resulted from the disposal.

Note 6 – Notes payable

Notes payable consists of the following at September 30, 2009 and December 31, 2008, respectively:

Competitive Companies, Inc.

Notes to Consolidated Financial Statements

	September 30,	December 31,
	2009	2008

Unsecured promissory note carries an 8% interest rate, maturing on June 15, 2009.	$ 10,000	$ -

Unsecured promissory note carries an 8% interest rate, maturing on June 15, 2009.	10,000	-

Secured line of credit, including accrued interest, carries a variable interest rate at 2.25% above “Money Rates”. The line matured on March 17, 2009, and the Company is currently in the process of renewing the terms of agreement. The note carries an additional 5% default rate, and is secured by a $250,000 life insurance policy on the CEO.	147,683	-

Unsecured promissory note, including accrued interest, carries an 8.5% interest rate, maturing on October 1, 2010.	15,359	-

Unsecured, interest free promissory note carries a 5% late fee penalty in the event the Company is more than 10 days late with monthly payments of $1,000 beginning on September 1, 2008, matured on June 6, 2009. Currently in default.	10,000	-

Related party, unsecured promissory note carries an 18% interest rate, due on demand. Interest expense of $5,133 and $863 accrued during the years ended December 31, 2008 and 2007, respectively and remains unpaid as of December 31, 2008 (See Note 3).	-	4,500

Unsecured note payable in default to a stockholder, with interest at 8%, and monthly principal and interest payments of $683, maturing on February 23, 2011.	16,671	15,676
Total Notes payable	209,713	20,176
Less: current portion	209,713	11,700
Notes payable, less current portion	$ -	$ 8,476

Note 7 – Convertible Debt

Notes payable consists of the following at September 30, 2009 and December 31, 2008, respectively:

Competitive Companies, Inc.

Notes to Consolidated Financial Statements

	September 30,	December 31,
	2009	2008

Unsecured convertible promissory note carries an 8.75% interest rate, maturing on July 16, 2009. The principal is convertible into shares of common stock at the discretion of the note holder at a price equal to eighty percent (80%) of the volume weighted average price of the Company’s common stock for the twenty two (22) trading days prior to the conversion date, or $0.06 per share, whichever is greater.	$ 50,000	$ -

Unsecured convertible promissory note carries an 8.75% interest rate, maturing on December 26, 2009. The principal is convertible into shares of common stock at the discretion of the note holder at a price equal to eighty percent (80%) of the volume weighted average price of the Company’s common stock for the twenty two (22) trading days prior to the conversion date, or $0.001 per share, whichever is greater.	10,000	-


Unsecured convertible promissory note carries an 8.75% interest rate, maturing on December 15, 2009. The principal is convertible into shares of common stock at the discretion of the note holder at a price equal to eighty percent (80%) of the volume weighted average price of the Company’s common stock for the twenty two (22) trading days prior to the conversion date, or $0.001 per share, whichever is greater.	10,000	-

Unsecured convertible promissory note carries an 8.75% interest rate, maturing on December 15, 2009. The principal is convertible into shares of common stock at the discretion of the note holder at a price equal to eighty percent (80%) of the volume weighted average price of the Company’s common stock for the twenty two (22) trading days prior to the conversion date, or $0.001 per share, whichever is greater.	5,000	-

Competitive Companies, Inc.

Notes to Consolidated Financial Statements


Unsecured convertible promissory note carries an 8.75% interest rate, maturing on May 11, 2009. The principal is convertible into shares of common stock at the discretion of the note holder at a price equal to eighty percent (80%) of the volume weighted average price of the Company’s common stock for the twenty two (22) trading days prior to the conversion date, or $0.001 per share, whichever is greater.	10,000	10,000

Unsecured convertible promissory note carries an 8.75% interest rate, maturing on April 30, 2009. The principal is convertible into shares of common stock at the discretion of the note holder at a price equal to eighty percent (80%) of the volume weighted average price of the Company’s common stock for the twenty two (22) trading days prior to the conversion date, or $0.001 per share, whichever is greater.	5,000	5,000
Total convertible debt	90,000	15,000
Less: discount on beneficial conversion feature	3,239	2,630
Convertible debt	$ 86,761	$ 12,370

In addition, the Company recognized and measured the embedded beneficial conversion feature present in the convertible debt by allocating a portion of the proceeds equal to the intrinsic value of the feature to additional paid-in-capital. The intrinsic value of the feature was calculated on the commitment date using the effective conversion price of the convertible debt. This intrinsic value is limited to the portion of the proceeds allocated to the convertible debt.

The aforementioned accounting treatment resulted in a total debt discount equal to $12,669. The discount is amortized over a six month period, from the date of issuance until the stated redemption date of the debt.

According to the terms of the Convertible Promissory Notes, the number of shares that would be received upon conversion was 1,543,376 shares at September 30, 2009.

During the nine months ending September 30, 2009, the Company recorded financial expenses in the amount of $8,310 attributed to the amortization of the aforementioned debt discount.

As of September 30, 2009, no shares were issued pursuant to debt conversion.

The Company recorded interest expense in the amount of $14,230 and $5,694 for the nine months ending September 30, 2009 and 2008, respectively.

Competitive Companies, Inc.

Notes to Consolidated Financial Statements

Note 8 – Stockholders’ Equity

On January 30, 2009, the shareholders of the Company voted to increase the authorized common shares of the Company from 70,000,000 authorized shares of common stock to 500,000,000 authorized shares of common stock. Additionally, the shareholders voted to increase the authorized preferred shares of the Company from 10,000,000 authorized shares of preferred stock to 100,000,000 authorized shares of preferred stock. As a result of this vote, the Company filed an amendment to its Articles of Incorporation to reflect this change.

Common stock

On September 18, 2009 the Company sold 510,564 shares of common stock as a subscription payable to an investor in exchange for proceeds of $25,528. The shares were issued on October 29, 2009.

On September 18, 2009 the Company sold 100,000 shares of common stock as a subscription payable to an investor in exchange for proceeds of $5,000. The shares were issued on October 13, 2009.

On August 24, 2009 the Company sold 100,000 shares of common stock to an investor in exchange for proceeds of $5,000.

On August 24, 2009, the Company issued 50,000 shares of common stock to an investor that had purchased the Company’s common stock on January 19, 2009 in exchange for proceeds of $2,500.

On August 24, 2009 the Company issued 643,115 shares of common stock pursuant to the share exchange agreement dated April 2, 2009.

On August 21, 2009 the Company sold 1,048,439 shares of common stock to an investor in exchange for proceeds of $52,422.

Competitive Companies, Inc.

Notes to Consolidated Financial Statements

On August 21, 2009 the Company sold 20,000 shares of common stock as a subscription payable to an investor in exchange for proceeds of $1,000. The shares were issued on October 13, 2009.

On August 17, 2009 the Company sold 100,000 shares of common stock as a subscription payable to an investor in exchange for proceeds of $5,000. The shares were issued on October 13, 2009.

On August 14, 2009 the Company sold 40,000 shares of common stock as a subscription payable to an investor in exchange for proceeds of $2,000. The shares were issued on October 13, 2009.

On August 14, 2009 the Company sold 60,000 shares of common stock as a subscription payable to an investor in exchange for proceeds of $3,000. The shares were issued on November 16, 2009.

On August 13, 2009 the Company sold 100,000 shares of common stock as a subscription payable to an investor in exchange for proceeds of $5,000. The shares were issued on October 13, 2009.

On August 10, 2009 the Company sold 160,000 shares of common stock as a subscription payable to an investor in exchange for proceeds of $8,000. The shares were issued on November 16, 2009.

On August 4, 2009 the Company sold 100,000 shares of common stock as a subscription payable to an investor in exchange for proceeds of $5,000. The shares were issued on October 13, 2009.

On July 29, 2009 the Company sold 150,000 shares of common stock as a subscription payable to an investor in exchange for proceeds of $6,000. The shares were issued on November 16, 2009.

On July 29, 2009 the Company sold 400,000 shares of common stock to an investor in exchange for proceeds of $20,000.

On July 15, 2009 the Company issued a total of 910,000 free trading (S-8) shares of common stock for accounting services rendered. The fair market value of the shares was $45,500 based on the closing stock price on the grant date.

On July 15, 2009 the Company issued a total of 1,463,282 free trading (S-8) shares of common stock for legal services rendered. The fair market value of the shares was $73,164 based on the closing stock price on the grant date.

Competitive Companies, Inc.

Notes to Consolidated Financial Statements

On July 15, 2009 the Company issued 285,710 shares of common stock pursuant to the share exchange agreement dated April 2, 2009.

On May 1, 2009 the Company issued 21,852,983 of the 31,102,740 shares granted as part of the share exchange agreement on April 2, 2009.

On April 12, 2009 the Company sold 124,000 shares of common stock as a subscription payable to an investor in exchange for proceeds of $6,200. The shares were issued on November 16, 2009.

On April 10, 2009 the Company issued 100,000 shares of common stock to an individual investor that had purchased the Company’s common stock on March 28, 2007, which was previously recorded as a stock subscription payable in the total amount of $10,000.

On April 2, 2009 the Company authorized the issuance of 31,102,740 shares of common stock in exchange for a total of 3,110,274 shares (10:1) of four private companies, representing 100% of their outstanding equity as part of a share exchange agreement. The four acquired entities are consolidated in the financial statements herein. The total fair value of the common stock was $1,555,137.

On March 31, 2009 the Company issued a total of 2,080,280 shares of common stock to seven individual investors that had purchased the Company’s common stock during the year ending December 31, 2008, which was previously recorded as stock subscriptions payable in the total amount of $104,014.

On March 25, 2009 the Company sold 100,000 shares of common stock as a subscription payable to an investor in exchange for proceeds of $5,000. The shares were issued on April 10, 2009.

On March 18, 2009 the Company sold 23,480 shares of common stock as a subscription payable to an investor in exchange for proceeds of $1,174. The shares were issued on April 10, 2009.

On March 3, 2009 the Company sold 100,000 shares of common stock as a subscription payable to an investor in exchange for proceeds of $5,000. The shares were issued on April 10, 2009.

On March 3, 2009 the Company sold 70,000 shares of common stock as a subscription payable to an investor in exchange for proceeds of $3,500. The shares were issued on April 10, 2009.

Competitive Companies, Inc.

Notes to Consolidated Financial Statements

On February 27, 2009 the Company sold 400,000 shares of common stock as a subscription payable to an investor in exchange for proceeds of $20,000. The shares were issued on April 10, 2009.

On February 5, 2009 the Company sold 400,000 shares of common stock to an investor in exchange for proceeds of $20,000.

On January 19, 2009 the Company sold 160,000 shares of common stock to an investor in exchange for proceeds of $8,000. On August 24, 2009 the Company issued 50,000 shares, and the remaining 110,000 shares were issued on November 16, 2009.

On January 14, 2009 the Company sold 540,000 shares of common stock to an investor in exchange for proceeds of $27,000.

On January 5, 2009 the Company sold 60,000 shares of common stock to an investor in exchange for proceeds of $3,000.

On January 5, 2009 the Company sold 120,000 shares of common stock to an investor in exchange for proceeds of $6,000.

On January 1, 2009 the Company sold 22,000 shares of common stock to an investor in exchange for proceeds of $1,100.

Note 9 – Subsequent Events

Common stock

On October 13, 2009 the Company issued a total of 480,000 shares of common stock to seven individual investors that had purchased the Company’s common stock, previously recorded as stock subscriptions payable in the total amount of $24,000.

On October 13, 2009 the Company sold 186,000 shares of common stock to an investor in exchange for proceeds of $9,300.

On October 27, 2009 the Company issued 250,000 free trading (S-8) shares of common stock for services rendered. The fair market value of the shares was $10,000 based on the closing stock price on the grant date.

October 29, 2009 the Company issued 1,000,000 shares of common stock pursuant to the share exchange agreement dated April 2, 2009.

On October 29, 2009 the Company issued 510,564 shares of common stock to an investor that had purchased the Company’s common stock, previously recorded as a stock subscription payable in the total amount of $25,528.

Competitive Companies, Inc.

Notes to Consolidated Financial Statements

On November 16, 2009 the Company issued a total of 604,000 shares of common stock to four individual investors that had purchased the Company’s common stock, previously recorded as stock subscriptions payable in the total amount of $28,700.

On November 16, 2009 the Company sold 33,333 shares of common stock to an investor in exchange for proceeds of $1,000.

On November 16, 2009 the Company sold 25,000 shares of common stock to an investor in exchange for proceeds of $1,000.

On November 16, 2009 the Company sold 400,000 shares of common stock to an investor in exchange for proceeds of $10,000.

On November 20, 2009 the Company sold 200,000 shares of common stock to an investor in exchange for proceeds of $5,000.

There are no additional subsequent events to report through November 23, 2009, the date the financial statements were issued.

FORWARD-LOOKING STATEMENTS

This document contains “forward-looking statements”. All statements other than statements of historical fact are “forward-looking statements” for purposes of federal and state securities laws, including, but not limited to, any projections of earnings, revenue or other financial items; any statements of the plans, strategies and objections of management for future operations; any statements concerning proposed new services or developments; any statements regarding future economic conditions or performance; any statements of belief; and any statements of assumptions underlying any of the foregoing.

Forward-looking statements may include the words “may,” “could,” “estimate,” “intend,” “continue,” “believe,” “expect” or “anticipate” or other similar words. These forward-looking statements present our estimates and assumptions only as of the date of this report. Accordingly, readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the dates on which they are made. Except for our ongoing securities laws, we do not intend, and undertake no obligation, to update any forward-looking statement. Additionally, the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 most likely do not apply to our forward-looking statements as a result of being a penny stock issuer. You should, however, consult further disclosures we make in future filings of our Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and Current Reports on Form 8-K.

Although we believe the expectations reflected in any of our forward-looking statements are reasonable, actual results could differ materially from those projected or assumed in any of our forward-looking statements. Our future financial condition and results of operations, as well as any forward-looking statements, are subject to change and inherent risks and uncertainties. The factors impacting these risks and uncertainties include, but are not limited to:

·	Our current deficiency in working capital;

·	Increased competitive pressures from existing competitors and new entrants;

·	Our ability to market our services to new subscribers;

·	Inability to locate additional revenue sources and integrate new revenue sources into our organization;

·	Adverse state or federal legislation or regulation that increases the costs of compliance, or adverse findings by a regulator with respect to existing operations;

·	Changes in U.S. GAAP or in the legal, regulatory and legislative environments in the markets in which we operate;

·	Consumer acceptance of price plans and bundled offering of our services;

·	Loss of customers or sales weakness;

·	Technological innovations;

·	Inability to efficiently manage our operations;

·	Inability to achieve future sales levels or other operating results;

·	Inability of management to effectively implement our strategies and business plan;

·	Key management or other unanticipated personnel changes;

·	The unavailability of funds for capital expenditures; and

·	The other risks and uncertainties detailed in this report.

For a detailed description of these and other factors that could cause actual results to differ materially from those expressed in any forward-looking statement, please see Item 1A.

Risk Factors in this document and in our Annual Report on Form 10-K for the year ended December 31, 2008.

AVAILABLE INFORMATION

We file annual, quarterly and special reports and other information with the SEC that can be inspected and copied at the public reference facility maintained by the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549-0405. Information regarding the public reference facilities may be obtained from the SEC by telephoning 1-800-SEC-0330. The Company’s filings are also available through the SEC’s Electronic Data Gathering Analysis and Retrieval System which is publicly available through the SEC’s website (www.sec.gov). Copies of such materials may also be obtained by mail from the public reference section of the SEC at 100 F Street, N.E., Room 1580, Washington, D.C. 20549-0405 at prescribed rates.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and related notes included elsewhere in this quarterly report. References in the following discussion and throughout this quarterly report to “we”, “our”, “us”, “CCI”, “the Company”, and similar terms refer to Competitive Companies, Inc. unless otherwise expressly stated or the context otherwise requires.

OVERVIEW AND OUTLOOK

CCI is a Nevada corporation that acts as a holding company for its operating subsidiaries, Competitive Communications, Inc. (“Competitive Communications”), which is an approved and regulated local and long distance telephone company, and CCI Residential Services, Inc. (“CCI Residential”), which is a non-regulated telephone company providing local and long distance telephone service, high-speed Internet and cable television service to large apartment complexes.

The telecommunications products and services provided by the Company and its subsidiaries include local telephone services, domestic and international long distance services, enhanced voice, data and Internet services, and Cable TV service primarily to residents of apartment complexes, retail businesses and residential users. It is our intention in the future to provide bundled services to our customers as well as expand to customers beyond apartment complexes by providing additional services and options other than our current products.

On April 2, 2009, we entered into an acquisition agreement and plan of merger whereby the Company acquired 100% of the outstanding interest of four private companies under common control by the CEO of Competitive Companies, Inc. Pursuant to the share exchange agreement, Competitive Companies, Inc. (CCI) acquired 100% of the combined equity of DiscoverNet, Inc. (DNI), ICM, Inc. (ICMI), ICM, LLC (ICML), and DiscoverNet, LLC (DNL) in exchange for stock on a 10 to 1 basis, resulting in the issuance of 31,102,740 shares. The fair market value of the shares was $1,555,137 based on the closing stock price on April 2, 2009, the date of grant.

The merger provides us with valuable assets, sound management and a solid investor base that is an integral part of our business.

Management believes the communications network, management team and other assets acquired will enable the Company to enhance our business model and enable us to take advantage of opportunities in the fast changing telecommunications industry.

Recent Developments

Letter of Intent with Voice Vision, Inc.

On November 6, 2009, we entered into a non-binding Letter of Intent with Voice Vision, Inc. (“VVI”) concerning the acquisition of one hundred percent (100%) of the outstanding capital stock or ownership interest of VVI, a communications company organized under the laws of the State of California. The terms of the proposed agreement call for the Company to assume certain liabilities not to exceed $75,000 directly related to the business. The proposed purchase price in exchange for 100% of the total issued and outstanding stock of VVI is 10,000,000 shares of our common stock with an estimated value of $500,000.

The planned acquisition is consistent with our strategic business plan, designed to build enterprise value through organic growth and select acquisition opportunities associated with cross-functional integration of complementary core competencies.

The LOI with VVI reflects the present intentions of the parties and is subject to execution of a definitive agreement.

As of the date hereof, we have not entered into a definitive and/or binding agreement for the LOI with VVI mentioned above. When any such agreement is reached we will file notice of such agreement or facts with the Securities and Exchange Commission on Form 8-K.

Press Releases

On November 6, 2009, we issued a press release to announce we signed a Letter of Intent with Voice Vision, Inc. A copy of the press release is filed herewith as Exhibit 99.9.

Results of Operations for the Three and Six Months Ended September 30, 2009 and 2008

The following table summarizes selected items from the statement of operations for the period ended September 30, 2009 compared to September 30, 2008.

INCOME:

	Three Months Ended September 30,		Increase/(Decrease)		Nine Months Ended September 30,		Increase/(Decrease)
	2009	2008	$	%	2009	2008	$	%

Revenue	$69,504	$158,966	$(89,462)	(56%)	$233,240	$518,542	$(285,302)	(55%)

Cost of Sales	69,215	93,326	(24,111)	(26%)	298,786	298,548	238	--

Gross Profit (Loss)	289	65,640	(65,351)	(100%)	(65,546)	219,994	(285,540)	(130%)

Gross Profit Percentage of Sales	0%	41%	--	(41%)	(28%)	42%	--	(72%)

Revenues

Revenues for the three and nine months ended September 30, 2009 were $69,504 and $233,240 compared to revenues of $158,966 and $518,542 for the three and nine months ended September 30, 2008. This resulted in a decrease in revenues of $89,462 or 56% for the three months ended and a decrease in revenues of $285,302 or 55% for the nine months ended. Regulations governed by the Federal Communications Commission were changed that allowed direct competitors to our telephone and cable services to compete with our customers in the apartment complexes that we service. As a result, we were unable to remain competitive with larger competitors and some of our customers have switched providers and ultimately, we have begun to experience a critical decrease in revenues.

Due to this change in the regulatory environment of our traditional business operations, we began to pursue and investigate alternative revenue sources. During the second quarter of 2009, we shifted our focus to revenue sources derived from providing wireless internet services to rural markets by acquiring four entities that will enable us to develop these revenue sources. The acquisitions were consummated on April 2, 2009. We anticipate these acquisitions will expand our growth potential and diversify our revenue base. Additionally, during the first and third quarters of 2009 we entered into two letters of intent which should also provide additional revenue streams in the future. We anticipate these services will provide additional revenues while maintaining a continuous focus on our core business; however, there can be no assurance that we will be able to successfully execute definitive agreements or properly integrate the entities that we have signed Letters of Intent with. As of the nine months ended September 30, 2009, we had not received significant revenue from newly identified sources.

Cost of sales

Our cost of sales for the three and nine months ended September 30, 2009 was $69,215 and $298,786, a decrease of $24,111 or 26% from $93,326 for the three months ended September 30, 2008 and an increase of $238 from $298,548 for the nine months ended September 30, 2008. The increase in our cost of sales during the nine months is a result of our acquisitions. We are continuing to eliminate underutilized circuits and have made continued efforts to continually manage and reduce costs, where applicable.

Gross profit percentage of revenue

As of the nine months ended September 30, 2009, gross profit margins decreased by 41% from the prior year due to our inability to reduce cost of sales on a pro rata basis with our reduction in revenues. Our fixed costs supporting the infrastructure of our telephone and cable services cannot be reduced without completely cutting off services. In addition, the expanded operations from California to Wisconsin as adopted with our acquisitions added significant costs that we expect to generate future revenues as we expand our operations. Overall our gross profit has decreased as a result of not being able to better manage our cost of sales in relation to our decrease in revenues.

EXPENSES:

	Three Months Ended September 30,		Increase/(Decrease)		Nine Months Ended September 30,		Increase/(Decrease)
	2009	2008	$	%	2009	2008	$	%
Expenses:
General and administrative	$244,895	$87,164	$157,731	181%	$453,561	$237,397	$216,164	91%
Salaries and wages	38,311	46,187	(7,876)	(17%)	192,138	151,147	176,991	117%
Consulting fees	140	90,813	(90,673)	(100%)	10,967	97,687	(86,720)	(89%)
Depreciation	11,646	8,553	3,093	36%	32,321	25,659	6,662	26%
Bad debt (recoveries)	(361)	(2,514)	2,153	(86%)	47,029	4,312	42,717	991%
Total Expenses	294,631	230,203	64,428	28%	736,016	510,202	225,814	44%

Net operating (loss)	(294,342)	(164,563)	129,779	79%	(801,562)	(290,208)	511,354	176%

Other income (expenses):
Other expense	(975)	-	975	-	(975)	-	975	-
Interest expense	(6,159)	(1,798)	4,361	243%	(14,230)	(5,694)	8,536	150%
Total other income (expenses)	(7,134)	(1,798)	5,336	297%	(15,205)	(5,694)	9,511	167%

Net (loss)	$(301,476)	$(166,361)	$135,115	81%	$(816,767)	$(295,902)	$520,865	176%

General and administrative expenses

General and administrative expenses for the three and nine months ended September 30, 2009 were $244,895 and $453,561, an increase of $157,731, or 181%, from $87,164 for the three months ended September 30, 2008 and an increase of $216,164, or 91%, from $237,397 for the nine months ended September 30, 2008. The increase in our general and administrative expenses was a result of the additional costs incurred to support our additional offices acquired with our expanded operations.

Salaries and wages

Salaries and wages for the three and nine months ended September 30, 2009 were $38,311 and $192,138, a decrease of $7,876, or 17%, from $46,187 for the three months ended September 30, 2008 and an increase of $176,991, or 117% from $151,147 for the nine months ended September 30, 2008. The increase in salary expenses during the nine months in 2009 was a result of the additional costs incurred to support our additional offices acquired with our expanded operations, and the expansion of our management team.

Consulting fees

Consulting fees for the three and nine months ended September 30, 2009 were $140 and $10,967, a decrease of $90,673, or 100%, from $90,813 for the three months ended September 30, 2008 and a decrease of $86,720, or 89%, from $97,687 for the nine months ended September 30, 2008. The decrease in consulting fees was a result of using less professional services.

Depreciation

Depreciation expenses for the three and nine months ended September 30, 2009 were $11,646 and $32,321, an increase of $3,093, or 36%, from $8,553 for the three months ended September 30, 2008 and an increase of $6,662, or 26%, from $25,659 for the nine months ended September 30, 2008. The increases are due to the additional depreciation derived from the assets acquired in our merger. We anticipate our depreciation expenses to remain stable.

Bad debt

Bad debt expenses (recoveries) for the three and nine months ended September 30, 2009 were $(361) and $47,029, a decrease of $2,153, or 86%, from $(2,514) for the three months ended September 30, 2008 and an increase of $42,717, or 99%, from $4,312 for the nine months ended September 30, 2008. Our increase in bad debt expenses in the nine months in 2009 is a result of our discontinued support of our residential DSL and Cable services. As a result, our collectability became uncertain and we significantly wrote down our accounts receivable.

Net operating (loss)

The net operating loss for the three and nine months ended September 30, 2009 was $294,342 and $801,562, an increase of $129,779, or 79%, from $164,563 for the three months ended September 30, 2008 and an increase of $511,354, or 176%, from $290,208 for the nine months ended September 30, 2008. Our increased loss was due to a significant decrease in revenues and additional costs associated with the expanded operations acquired in our merger.

Other income (expense)

Other income (expense) for the three and nine months ended September 30, 2009 was $(975) and $(975), compared to $0 for the three and nine months ended September 30, 2008. The amount of other income (expense) in the three and nine months ended 2009 was due to a $975 bankruptcy filing charge with regard to our recently acquired subsidiary, DiscoverNet, Inc.

Interest expense

Interest expense for the three and nine months ended September 30, 2009 was $6,159 and $14,230, as compared to $1,798 and $5,694 for the same periods in 2008. Our interest expense in 2009 was higher because of an increase in loans requiring interest payments and interest expense.

Net (loss)

Our net loss for the three and nine months ended September 30, 2009 was $301,476 and $816,767, an increase of $135,115, or 81%, from $166,361 for the three months ended September 30, 2008 and an increase of $520,865, or 176%, from $295,902 for the nine months ended September 30, 2008. We continue to have a net loss and believe the loss will be reduced and profitability will be attained in the future as we bring our products to market.

Liquidity and Capital Resources

The following table summarizes total current assets, liabilities and working capital at September 30, 2009 compared to December 31, 2008.

	September 30, 2009	December 31, 2008	Increase / (Decrease)
	September 30, 2009	December 31, 2008	$	%

Current Assets	$85,629	$ 108,851	$(23,222)	(22%)

Current Liabilities	$1,040,607	$ 263,577	$777,030	295%

Working (Deficit)	$(954,978)	$(154,726)	$800,252	517%

While we have raised capital to meet our working capital and financing needs in the past, additional financing is required in order to meet our current and projected cash flow deficits from operations and development of alternative revenue sources. As of September 30, 2009, we had a working capital deficit of $954,978. Our poor financial condition raises substantial doubt about our ability to continue as a going concern and we have incurred losses since inception and may incur future losses. In the past, we have conducted private placements of equity shares and during the nine months of 2009 we received approximately $254,924 in proceeds from the sale of our shares.

During the nine months ending September 30, 2009, we executed four unsecured promissory notes for a total of $75,000. The notes carry an 8.75% interest rate and mature at various dates through July of 2010. The principal is convertible into shares of common stock at the discretion of the note holder at a price equal to 80% of the volume weighted average price of the Company’s common stock for the 22 days prior to conversion, or $.001 per share, whichever is greater.

Should we not be able to continue to secure additional financing when needed, we may be required to slow down or suspend our growth or reduce the scope of our current operations, any of which would have a material adverse effect on our business.

Our future capital requirements will depend on many factors, including the expansion of our wireless internet services in rural markets; VoIP services; additional marketing of the (800) services; the cost and availability of third-party financing for development; addition of new revenue sources; and administrative and legal expenses.

We anticipate that we will incur operating losses in the next twelve months. Our prospects must be considered in light of the risks, expenses and difficulties frequently encountered by companies in their early stage of development. Such risks for us include, but are not limited to, an evolving and unpredictable business model; recognition of additional revenue sources; and the management of growth. To address these risks, we must, among other things, expand our customer base, implement and successfully execute our business and marketing strategy, respond to competitive developments, and attract, retain and motivate qualified personnel. There can be no assurance that we will be successful in addressing such risks, and the failure to do so could have a material adverse effect on our business prospects, financial condition and results of operations.

Satisfaction of our cash obligations for the next 12 months.

As of September 30, 2009, our cash balance was $56,559. Our plan for satisfying our cash requirements for the next twelve months is through sales-generated income, sale of shares of our common stock, third party financing, and/or traditional bank financing. We anticipate sales-generated income during that same period of time, but do not anticipate generating sufficient amounts of revenues to meet our working capital requirements. Consequently, we intend to make appropriate plans to insure sources of additional capital in the future to fund growth and expansion through additional equity or debt financing or credit facilities.

Going concern.

Our consolidated financial statements are prepared using accounting principles generally accepted in the United States of America applicable to a going concern, which contemplate the realization of assets and liquidation of liabilities in the normal course of business. We have incurred continuous losses from operations, have an accumulated deficit of $4,016,344 and a working capital deficit of $954,978 at September 30, 2009, and have reported negative cash flows from operations over the last five years. In addition, we do not currently have the cash resources to meet our operating commitments for the next twelve months. The Company’s ability to continue as a going concern must be considered in light of the problems, expenses, and complications frequently encountered by entrance into established markets and the competitive nature in which we operate.

Summary of product and research and development that we will perform for the term of our plan.

We are not anticipating significant research and development expenditures in the near future.

Expected purchase or sale of plant and significant equipment.

We do not anticipate the purchase or sale of any plant or significant equipment as such items are not required by us at this time.

Significant changes in the number of employees.

As of September 30, 2009, we had four full-time employees. Currently, there are no organized labor agreements or union agreements between us and our employees.

Assuming we are able to pursue additional revenue through acquisitions and/or strategic alliances with those companies we have executed Letters of Intent with, we anticipate an increase of personnel and may need to hire additional employees. In the interim, we intend to use the services of independent consultants and contractors to perform various professional services when appropriate. We believe the use of third-party service providers may enhance our ability to control general and administrative expenses and operate efficiently.

Off-Balance Sheet Arrangements

We do not have any off-balance sheet arrangements that have or are reasonably likely to have a current or future effect on our financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources that are material to investors.

Recently Issued Accounting Standards

During March 2008, the FASB issued new accounting guidance concerning disclosures about derivative instruments and hedging activities. This new standard requires enhanced disclosures for derivative instruments, including those used in hedging activities. It is effective for fiscal years and interim periods beginning after November 15, 2008, and was applicable to the Company in the first quarter of fiscal 2009. The adoption of this standard did not have any impact on the Company’s consolidated financial statements.

Item 3. Quantitative and Qualitative Disclosure About Market Risk.

This item in not applicable as we are currently considered a smaller reporting company.

Item 4T. Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Principal Accounting Officer, William Gray, has evaluated the effectiveness of our disclosure controls and procedures (as defined in Rule 13a-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on the evaluation, Mr. Gray concluded that our disclosure controls and procedures are not effective in timely alerting him to material information relating to us (including our consolidated subsidiaries) required to be included in our periodic SEC filings and ensuring that information required to be disclosed by us in the reports we file or submit under the Act is accumulated and communicated to our management, including our chief financial officer, or person performing similar functions, as appropriate to allow timely decisions regarding required disclosure, for the following reasons:

·	The Company does not have an independent board of directors or audit committee or adequate segregation of duties;

·	All of our financial reporting is carried out by our financial consultant;

·	We do not have an independent body to oversee our internal controls over financial reporting and lack segregation of duties due to the limited nature and resources of the Company.

We plan to rectify these weaknesses by implementing an independent board of directors and hiring additional accounting personnel once we have additional resources to do so.

Changes in Internal Control Over Financial Reporting

There were no changes in our internal control over financial reporting that occurred during our most recent fiscal quarter that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II – OTHER INFORMATION

Item 1. Legal Proceedings.

From time to time, we may become involved in various lawsuits and legal proceedings which arise in the ordinary course of business. However, litigation is subject to inherent uncertainties, and an adverse result in these or other matters may arise from time to time that may harm our business. We are not presently a party to any material litigation, nor to the knowledge of management is any litigation threatened against us, which may materially affect us.

Item 1A. Risk Factors.

Risks Relating to Our Business and Marketplace

We have incurred losses since inception and expect to incur losses for the foreseeable future. In addition, our poor financial condition raises substantial doubt about our ability to continue as a going concern.

Our net operating losses for the three and nine months ended September 30, 2009 were $294,379 and $805,795. As of September 30, 2009, we had $56,559 in cash available to finance our operations and a working capital deficit of $954,978. Capital requirements have been and will continue to be significant, and our cash requirements have exceeded cash flow from operations since inception. We are in need of additional capital to continue our operations and have been dependent on the proceeds of private placements of securities and recent loans from an officer to satisfy working capital requirements. We will continue to be dependent upon the proceeds of future private or public offerings to fund development of products, short-term working capital requirements, marketing activities and to continue implementing the current business strategy. There can be no assurance that we will be able to raise the necessary capital to continue operations.

Our ability to continue as a going concern is dependent on our ability to raise funds to finance ongoing operations; however, we may not be able to raise sufficient funds to do so. Our independent auditors have indicated that there is substantial doubt about our ability to continue as a going concern over the next twelve months. Because of these factors, an investor cannot determine if and when we will become profitable and therefore runs the risk of losing their investment.

If we are unable to obtain additional funding, our business operations will be harmed and if we do obtain additional financing our then existing stockholders may suffer substantial dilution.

We will require additional funds to expand our operations and believe the current cash on hand and the other sources of liquidity will not be sufficient enough to fund our operations through fiscal 2009. We anticipate that we will require approximately $1,000,000 to $2,000,000 to fund our continued operations for fiscal 2009 as well as be able to close on the intended acquisitions, depending on revenue from operations.

Additional capital will be required to effectively support the operations and to otherwise implement our overall business strategy. There can be no assurance that financing will be available in amounts or on terms acceptable to us, if at all. The inability to obtain additional capital will restrict our ability to grow and may reduce our ability to continue to conduct business operations. If we are unable to obtain additional financing, we will likely be required to curtail our marketing and development plans and possibly cease our operations. Any additional equity financing may involve substantial dilution to our then existing stockholders.

We may acquire assets or other businesses in the future.

We may consider acquisitions of assets or other business. Any acquisition involves a number of risks that could fail to meet our expectations and adversely affect our profitability. For example:

·	The acquired assets or business may not achieve expected results;

·	We may incur substantial, unanticipated costs, delays or other operational or financial problems when integrating the acquired assets;

·	We may not be able to retain key personnel of an acquired business;

·	Our management’s attention may be diverted; or

·	Our management may not be able to manage the acquired assets or combined entity effectively or to make acquisitions and grow our business internally at the same time.

If these problems arise we may not realize the expected benefits of an acquisition.

Without realization of additional capital, it would be unlikely for us to continue as a going concern.

As a result of our deficiency in working capital at September 30, 2009 and other factors, our independent auditors have indicated that there is substantial doubt about our ability to continue as a going concern over the next twelve months. The financial statements do not include any adjustments as a result of this uncertainty. The going concern qualification may adversely impact our ability to raise the capital necessary for the continuation of operations.

Our limited resources may prevent us from retaining key employees or inhibit our ability to hire and train a sufficient number of qualified management, professional, technical and regulatory personnel.

Our success may also depend on our ability to attract and retain other qualified management and personnel familiar with the telecommunications industry. Currently, we have a limited number of personnel that are required to perform various roles and duties as a result of our limited financial resources. We intend to use the services of independent consultants and contractors to perform various professional services, when appropriate, to help conserve our capital. However, if and when we determine to acquire additional personnel, we will compete for such persons with other companies and other organizations, some of which have substantially greater capital resources than we do. We cannot give you any assurance that we will be successful in recruiting or retaining personnel of the requisite caliber or in adequate numbers to enable us to conduct our business.

Competition from companies with already established marketing links and brand recognition to our potential customers may adversely affect our ability to introduce and market our products.

The telecommunications industry is highly competitive. Many of our current and potential competitors have financial, personnel and other resources, including brand name recognition, substantially greater than ours, as well as other competitive advantages over us. Certain competitors may be able to secure product from vendors on more favorable terms, devote greater resources to marketing and promotional campaigns, and adopt more aggressive pricing than we will. There can be no assurance we will be able to compete successfully against these competitors, which ultimately may have a materially adverse effect on our business, results of operations, financial condition and potential products in the future.

We may not be able to provide our products and services if we do not connect or continue to connect with the traditional carriers, our primary competitors.

As a competitive carrier, we must coordinate with traditional carriers so that we can provide local service to customers on a timely and competitive basis. The Telecommunications Act created incentives for regional Bell operating companies to cooperate with competitive carriers and permit access to their facilities by denying such companies the ability to provide in-region long distance services until they have satisfied statutory conditions designed to open their local markets to competition. The regional Bell operating companies in our markets are not yet permitted by the FCC to offer long distance services. These companies may not be accommodating once they are permitted to offer long distance service. Currently, AT&T is permitted to offer both local and long distance services in some of our mutual service areas, but we have not yet noticed any impact on our markets.

Many competitive carriers, including us, have experienced difficulties in working with traditional carriers with respect to initiating, connecting, and implementing the systems used by these competitive carriers to order and receive network elements and wholesale services and locating equipment in the offices of the traditional carriers.

If we cannot obtain the cooperation of a regional Bell operating company in a region, whether or not we have been authorized to offer long distance services, our ability to offer local services in such regions on a timely and cost-effective basis will be harmed.

Risks Relating to our Common Stock

If we fail to remain current on our reporting requirements, we could be removed from the OTC Bulletin Board which would limit the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.

Companies trading on the OTC Bulletin Board, such as us, must be reporting issuers under Section 12 of the Securities Exchange Act of 1934, as amended, and must be current in their reports under Section 13, in order to maintain price quotation privileges on the OTC Bulletin Board. More specifically, FINRA has enacted Rule 6530, which determines eligibility of issuers quoted on the OTC Bulletin Board by requiring an issuer to be current in its filings with the Commission. Pursuant to Rule 6530(e), if we file our reports late with the Commission three times in a two-year period or our securities are removed from the OTC Bulletin Board for failure to timely file twice in a two-year period then we will be ineligible for quotation on the OTC Bulletin Board for one year. We have had one late filing and have once been removed from the OTC Bulletin Board in the last two years. Therefore, we must not have two more late filings or have our securities removed from the OTC Bulletin Board, within the two year period, otherwise we will be in jeopardy of being dequoted from the OTC Bulletin Board for a one year period. As a result, the market liquidity for our securities could be severely adversely affected by limiting the ability of broker-dealers to sell our securities and the ability of stockholders to sell their securities in the secondary market.

Our internal controls may be inadequate, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public.

Our management is responsible for establishing and maintaining adequate internal control over financial reporting. As defined in Exchange Act Rule 13a-15(f), internal control over financial reporting is a process designed by, or under the supervision of, the principal executive and principal financial officer and effected by the board of directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles and includes those policies and procedures that: (i) pertain to the maintenance of records that in reasonable detail accurately and fairly reflect the transactions and dispositions of the assets of Competitive Companies; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of Competitive Companies are being made only in accordance with authorizations of management and directors of Competitive Companies, and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of Competitive Companies’ assets that could have a material effect on the financial statements.

We have a limited number of personnel that are required to perform various roles and duties. Furthermore, we have one individual, our CEO, who is responsible for monitoring and ensuring compliance with our internal control procedures. As a result, our internal controls may be inadequate or ineffective, which could cause our financial reporting to be unreliable and lead to misinformation being disseminated to the public. Investors relying upon this misinformation may make an uninformed investment decision.

Because our common stock is deemed a low-priced “Penny Stock,” an investment in our common stock should be considered high risk and subject to marketability restrictions.

Since our common stock is a “penny stock,” as defined in Rule 3a51-1 under the Securities Exchange Act, it will be more difficult for investors to liquidate their investment of our common stock. Until the trading price of the common stock rises above $5.00 per share, if ever, trading in the common stock is subject to the penny stock rules of the Securities Exchange Act specified in rules 15g-1 through 15g-10. Those rules require broker-dealers, before effecting transactions in any penny stock, to:

·	Deliver to the customer, and obtain a written receipt for, a disclosure document;

·	Disclose certain price information about the stock;

·	Disclose the amount of compensation received by the broker-dealer or any associated person of the broker-dealer;

·	Send monthly statements to customers with market and price information about the penny stock; and

·	In some circumstances, approve the purchaser’s account under certain standards and deliver written statements to the customer with information specified in the rules.

Consequently, the penny stock rules may restrict the ability or willingness of broker-dealers to sell the common stock and may affect the ability of holders to sell their common stock in the secondary market and the price at which such holders can sell any such securities. These additional procedures could also limit our ability to raise additional capital in the future.

FINRA sales practice requirements may also limit a stockholder’s ability to buy and sell our stock.

In addition to the “penny stock” rules described above, FINRA has adopted rules that require that, in recommending an investment to a customer, a broker-dealer must have reasonable grounds for believing that the investment is suitable for that customer. Prior to recommending speculative low priced securities to their non-institutional customers, broker-dealers must make reasonable efforts to obtain information about the customer’s financial status, tax status, investment objectives and other information. Under interpretations of these rules, FINRA believes that there is a high probability that speculative low priced securities will not be suitable for at least some customers. The FINRA requirements make it more difficult for broker-dealers to recommend that their customers buy our common stock, which may limit your ability to buy and sell our stock and have an adverse effect on the market for our shares.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

On July 15, 2009, we issued a total of 910,000 shares of our common stock for accounting services rendered to the Company. The shares issued were registered in a Registration Statement on Form S-8 filed on August 14, 2008.

On July 15, 2009, we issued a total of 1,463,282 shares of our common stock for legal services rendered to the Company. The shares issued were registered in a Registration Statement on Form S-8 filed on July 20, 2009.

On July 15, 2009, we issued 285,710 shares of common stock pursuant to the share exchange agreement dated April 2, 2009.

During the third quarter ended September 30, 2009, we sold a total of 2,398,439 shares of our common stock to 13 accredited investors for a total purchase price of $118,422, all of which was paid in cash. Of the 2,398,439 shares were issued in October and November 2009.

On August 24, 2009, we issued 50,000 shares of common stock to an investor that had purchased our common stock on January 19, 2009 in exchange for proceeds of $2,500.

On August 24, 2009, we issued 643,115 shares of common stock pursuant to the share exchange agreement dated April 2, 2009.

We believe the issuance of the restricted shares above will be exempt from the registration and prospectus delivery requirement of the Securities Act of 1933 by virtue of Section 4(2). The shares are to be issued directly by us and do not involve a public offering or general solicitation. The recipients of the shares were afforded an opportunity for effective access to our files and records that contained the relevant information needed to make their investment decision, including our financial statements and 34 Act reports. We reasonably believed that the recipients had such knowledge and experience in the Company’s financial and business matters that they were capable of evaluating the merits and risks of their investment.

Issuer Purchases of Equity Securities

We did not repurchase any of our securities during the quarter ended September 30, 2009.

Item 3. Defaults Upon Senior Securities.

None.

Item 4. Submission of Matters to a Vote of Security Holders.

None.

Item 5. Other Information.

Letter of Intent with Voice Vision, Inc.

Item 6. Exhibits.

			Incorporated by reference
Exhibit	Exhibit Description	Filed herewith	Form	Period ending	Exhibit	Filing date
2.1	Plan and agreement of reorganization between Huntington Telecommunications Partners, LP and Competitive Companies Holdings, Inc. and Competitive Companies, Inc.		SB-2		2	01/11/02
2.2	Plan and agreement of reorganization between Huntington Telecommunications Partners, LP and Competitive Companies Holdings, Inc. and Competitive Companies, Inc.		SB-2/A		2.2	08/02/02
2.3	Plan and agreement of reorganization between Huntington Telecommunications Partners, LP and Competitive Companies Holdings, Inc. and Competitive Companies, Inc.		SB-2/A		2.2	04/24/03
2.4	Plan and agreement of reorganization between Competitive Companies, Inc. and CCI Acquisition Corp		8-K		10.1	05/09/05
3(i)	Articles of Competitive Companies, as amended		SB-2		3(I)	01/11/02
3(ii)	Bylaws of Competitive Companies		SB-2		3(II)	01/11/02
4	Rights and Preferences of Preferred Stock		SB-2		4	01/11/02
10.1	Share Exchange Agreement dated April 1, 2009		10-Q	3/31/09	10.1	5/20/09
31.1	Certification of Mr. Gray pursuant to Section 302 of the Sarbanes-Oxley Act	X

			Incorporated by reference
Exhibit	Exhibit Description	Filed herewith	Form	Period ending	Exhibit	Filing date
32.1	Certification of Mr. Gray pursuant to Section 906 of the Sarbanes-Oxley Act	X
99.1	Press Release Announcing the Company’s access to government funding with the acquisition of carrier-grade microwave towers.		10-K	12/31/08	99.1	4/15/09
99.2	Press Release Announcing the Appointment of Dr. Ray Powers to the Board of Directors		10-K	12/31/08	99.2	4/15/09
99.3	Press Release Announcing the engagement of Worldwide Capital Group, LLC		10-K	12/31/08	99.3	4/15/09
99.4	Press Release Announcing the sales contract with a wholesale distributor of T-mobile network operating procedures		10-K	12/31/08	99.4	4/15/09
99.5	Press Release Announcing its contract with MLM Marketing Company for the purchase of 5,000 T-mobile SIMS cards		10-K	12/31/08	99.5	4/15/09
99.6	Press Release Announcing a Letter of Intent to acquire International Telecom, Inc.		10-K	12/31/08	99.6	4/15/09
99.7	Press Release Announcing the resignation of Ms. Tonni Smith-Atkins		10-K	12/31/08	99.7	4/15/09
99.8	Press Release Announcing the vendor financing agreement for the acquisition and marketing of IPTV services		10-K	12/31/08	99.8	4/15/09

99.9	Press Release Announcing Letter of Intent with Voice Vision, Inc. dated November 6, 2009	X

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

COMPETITIVE COMPANIES, INC.

(Registrant)

By: /S/ William Gray

William Gray,

Chief Executive Officer (On behalf of

the registrant and as principal accounting

officer)

Date: November 23, 2009